Special Risk Capital Management LLC

Within Range March 31, 2019

March 29, 2019 –  I’m pretty busy this weekend with family activities, so this will be short and to the point.  The chart below shows how this market is steadily strengthening and has broken above the 7643 level (NASDAQ Composite Index).  That’s where selling took place on a weekly basis the last time.  This is a good sign, but many under estimate the damage that was done in December of last year.  There was a ton of selling volume.  So while breaking above 7442 is bullish, it only is in the near term.

For this (and other) reasons, my thinking is that we’re in a longer term trading range between 7850 (past top) and 7442 (previous swing low); these are marked with blue dashed lines in the chart above.  Note Market Sentiment remains bearish and Money & Volume Flow indicators are fairly anemic.   Hence my gut feel that we’re likely in a trading range scenario right now.  We’ll just have to see if the only way traders can make money is to “sell the rips & buy the dips” in the coming days / weeks.  The strength in the Bond market (higher prices & lower rates) is another concerning factor.  The old saying that the bond market is wiser than the stock market has some validity.  What does the bond market know that the stock market doesn’t?

The table below shows what sectors are strong to weak in the short term.

Currently I’m modestly long this market, but have Cash to deploy if & when we get a solid turn in either direction.  Have a good week.  ….  Tom  …..

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.